Academic Skills For Accounting And Finance Assignment Sample

Academic Skills For Accounting And Finance Assignment

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Introduction

“Accounting and Finance (AF)” knowledge in academics has a crucial impact while working for any organisation. “Soft skills” are quite helpful for an employee to perform the accounting job with more specialisation. Technical skills are the utmost requirement for surviving in this competitive world as well as to perform any specific duty. Important soft skills are being an accountant is below:

• Strong communication
• “Attention to details”
• "Problem-solving skills"
• Time management
• Critical thinking
• Active learning
• Clerical knowledge
• Depth knowledge in “Microsoft Office Suite”

The required technical skills are:

• “Financial reporting and analysis” knowledge
• Account reconciliation
• Taxation knowledge
• Spreadsheet software skills
• Compliance software knowledge

Figure 1: Accounting skills

(Source: Wallstreetmojo, 2022)

Historical development of accounting and finance

AF is said to be more than only debit and credit activities, moreover, the “history of accounting or accountancy is thousands of years old”, and can be “traced to ancient civilizations”. As per the records, development in the early ancient period was found first in ancient Mesopotamia. The proofs are found in "writing, counting and money, and early auditing systems" by the people of that era, most likely "by the ancient Egyptians and Babylonians”. It is known that, at the time of Emperor Augustus, the “Roman government had access to detailed financial information”. Further, Chanakya an Indian guru, scholar, and mastermind in history had written a "Manuscript, similar to a financial management book”, during his presence in the period of “the Mauryan Empire”. Additionally, a book written by him named, “Arthashastra" seems to be the first book in India about AF, and in the book, he writes about the importance and the aspects of "maintaining books of accounts for a Sovereign State”. Luca Pacioli, an Italian person, has been considered as the “The Father of accounting and book keeping” for his first-ever published work on "the double-entry book keeping”.

Nowadays the AF and bookkeeping are organised by the rules of chartered accountants, and the "modern profession of the chartered accountant originated in Scotland", in the "nineteenth century". From there, AF never looked back, neither any fresh theory has been evolved in the field of "accounting and bookkeeping". However, the development of Business and globalisation has made all other countries establish their own "Chartered Accountant acts" in order to control and regulate the businesses and their AF for better reporting and keeping transparency. The rules have been imposed in a way that any business entity cannot be involved with any undue affairs. Changes are being made in the system of AF, due to the evolving business arena. Thus time to time upgrading is done in these acts and rules, to protect the side of investors and stakeholders of the companies (Kindig, 2019).

Roles and functions of accounting and finance

Roles of AF are:

• Efficient Planning: One Of the roles for better AF, is planning for doing business. With the evaluation of various data and funds reports, AF assists the managers of the company in the places where focus and development are required.
• Operation efficiency increase: Evaluating the report of sales and purchase, labour turnover, and various other outcomes with the help of AF statements, managers can detect the operational efficiency increase needed areas.
• Efficient Control: AF shows the performance of the organisation with the help of evaluating its value creation in terms of money. The sole objective of the organisations is to earn profit with the investment of funds, therefore financial records are the true indicator for efficiency, and if required the control needs to be upgraded.
• Labour efficiency increase: With the reports of labour turnover and production per labour, AF assists the management with the requirement of efficiency enhancement in labour and production. In absence of AF, evaluating the performance of labours separately might not be possible and that could have been harmful for the organisation.
• Management efficiency: AF states the figure of purchases, sales working capital, assets, and liabilities. After evaluating all the figures the management can besides its efficiency label and can act as per the requirements (Iedunote, 2022).
• Management Function: AF helps in management function too.
• Communicating: In order to communicate with the shareholders as well as the stakeholders, the report card of AF is a document proofing the performance level of the management.

Roles involved in management accounting

Functions of AF:

• One of the valuable functions of AF is to collect the information related to finance and store them for future reference in the form of financial statements.
• The mixed key function of AF is to gather data and reply to the financial management team for the preparation of strategies regarding business operation.
• AF Verified this result with “external accounts”, for better representation of the organisations reports (Wallstreetmojo, 2022).
• The most vital function of AF is to prepare an account by complying with all the rules and regulations needed to follow and after all tax requirements are fulfilled and booked.
• The function of AF does not after reporting of financial statements, it is the duty e of the Accountants to keep the records and support of the transactions related to the finance for several years (at least for 15 years). In order to eliminate any legal issues that happened.

Nowadays, almost every company follows International accounting methods for better representation of business transactions across the globe.

Figure 4: Functions involved in accounting

(Source: Wallstreetmojo, 2022)

Importance of accounting and finance

"Financing and accounting" are essential processes of a business, which can allow the professionals to understand the finance-related activities in their businesses. "Finance and accounting" are crucial because it can provide "data-driven" decision-making, while maintaining transparency and profitability. Bookkeeping as well as publishing finance related statements are equally important for a business and the reasons are as follows:

• "Data-Driven decision making"

Internal reporting for the financial data is completely data-driven and a part of management accounting. This can allow the administration of a company to evaluate the overall performance of the business along with the business trends. This overall process can result in the greater good of the business while ensuring metrics, facts, and information to guide strategic decisions in the business, which can further help to align the decisions with the objectives, initiatives, and goals for the company (Rikhardsson and Yigitbasioglu, 2018).

• Transparency

Publishment of data and accounts can ensure the transparency of the business while disclosing the financial performance. In this context, data and transparency can be considered as the key for the negotiation of higher fees. Moreover, transparency includes clarification of funds and investment firms. The case of consumer transparency can include disclosure of interest rates and bank fees. In addition, transparency can reduce the stock price fluctuations and related uncertainty.

• Communication with the external stakeholders

Business health, as well as financial health, can be enhanced by publishing financial data. Moreover, communication with external stakeholders such as shareholders, lenders, investors, and so on can be improved by disclosure of the data. This can increase the trust factors. Moreover, the stakeholders might be using the data to decide the investing and lending amount. 

• Compliance

In order to ensure the company's financial reporting is accurate, clear processes and procedures should be incorporated. In order to record as well as verify the expenses, revenues, liabilities, assets, and so on, finance statement disclosure plays a huge role.

Future development of accounting and finance

The history of accounting has rapidly changed over time concerning the rise of technology. Examples of rising in technology can be considered as minibots, automation, adaptive Intelligence, machine learning, and so on. Although intelligent technology seems relatively new, many companies have been using basic "automated accounting processes" for years. Accounting processes and tasks that machines can streamline involve accounts payable, supplier on-boarding, procurements, expense management, customer queries, and so on. It can be said that intelligent technologies are shaping the future of finance and accounting.

As advanced technologies can handle repetitive work well, human beings can use their brainpower more into the analysis-related work, which will engage a crucial link for clients as well as data. Some of the emerging technology for helping future development in the field of finance and accounting are as follows:

• "Automated accounting tasks"

Some of the time and labour investing facets of Accounting such as tax preparation, banking, audit, and payroll is becoming automated. These tasks are more repetitive and time-consuming. Examples of some software such as OneUp, Sage, Xero, and so on can offer automated data entry along with reconciliation while leaving the managerial and analytical work for human beings.

• Cloud computing

Working in the cloud is trending nowadays and it's a significant technology. Data along with the computing capabilities are allowed to access with the help of the internet (Huttunen et al. 2019). Moreover, cloud computing can ensure "constant monitoring rather than intermittent analysis" whenever the system or the information is updated.

• Block-chain technology

Block-chain technology is the most trending of all, which may have a greater impact on the future of accounting and finance. This technology can reduce the dependency on the bank and the long procedures (Nordgren et al. 2019). It can be called the new accounting ledger. Moreover, the access will be based on real-time ensuring smart contracts and record transactions.

Conclusion

Finance can be considered as the management of investment and monetary capital for individuals, governments, and corporations while accounting is the maintenance, recording, and reporting of the financial records. The history of accounting is as old as ancient civilizations. The history of finance and related accounting is closely related to the "development in writing, counting, and money". The importance of finance and accounting can be considered as the decision-making process, transparency, compliance, and many more. The future of "finance and accounting" might consider emerging technologies such as block chain technologies, cloud computing, "automated accounting tasks" and so forth. In conclusion, the use of technology can ease the process and hurdles of long and boring processes of repetitive work while human beings can use their brainpower to use critical analysis and managerial tasks.

References

American InterContinental University [AIU], Useful Skills Needed for a Career in Accounting. Available at: https://www.aiuniv.edu/degrees/business/articles/top-skills-for-career-in-accounting [Accessed on: 26/02/2022]

Huttunen, J., Jauhiainen, J., Lehti, L.A.U.R.A., Nylund, A.N.N.I.N.A., Martikainen, M. and Lehner, O.M., 2019. Big data, cloud computing and data science applications in finance and accounting. ACRN Journal of Finance and Risk Perspectives, 8, pp.16-30. Available at: http://www.acrn-journals.eu/resources/SI08_2019b.pdf [Accessed on: 27/02/22]

Iedunote, 2022. Management Accounting: Definition, Functions, Objectives, Roles. Available at: https://www.iedunote.com/management-accounting [Accessed on: 26/02/2022]

Kindig, A., 2019. Historical Development of Accounting. Available at: https://bizfluent.com/about-4731157-historical-development-accounting.html [Accessed on: 26/02/2022]

Nordgren, A.I.N.O., Weckström, E.L.L.E.N., Martikainen, M.I.N.N.A. and Lehner, O.M., 2019. Blockchain in the fields of finance and accounting: a disruptive technology or an overhyped phenomenon. ACRN Journal of Finance and Risk Perspectives, 8, pp.47-58. Available at: http://www.acrn-journals.eu/resources/SI08_2019d.pdf [Accessed on: 27/02/22]

Rikhardsson, P. and Yigitbasioglu, O., 2018. Business intelligence & analytics in management accounting research: Status and future focus. International Journal of Accounting Information Systems, 29, pp.37-58. Available at: https://eprints.qut.edu.au/117438/1/2018%2B02%2BRikhardsson%2Band%2BYigitbasioglu%2BIJAIS%2BAccepted%2Bmanuscript.pdf [Accessed on: 27/02/22]

Wallstreetmojo, 2022. Accounting skills, Available at: https://www.wallstreetmojo.com/accounting-skills/ [Accessed on: 26/02/2022]

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